I was impressed, but I wasn't surprised. After all, yesterday's announcement that Netflix
It was inevitable, even if Motley Fool Stock Advisor pick Netflix was the last one to see it that way.
We spoke to CEO Reed Hastings two years ago and asked him why the company wasn't expanding its advertising potential. This was his reply:
"If you look at some of the great brands that have been created, Starbucks
Reed, would you like some crow to go with that latte?
Just kidding. I think this is a brilliant move for many reasons.
1. Great hire. Peggy Fry was brought on to head up the new ad department. A six-year stint at Time Warner's
2. "Rent This Space" never looked so good in red. Every day finds Netflix processing a million DVD rental transactions. How sad to see all that juicy red space go to waste. The extent of the company's mailer marketing in the past has been one Garfield movie ad, a promotion for the Spider-Man movies, and green mailers when Shrek 2 came out.
It's not just film studios with new releases that will be drawn to market to the company's more than 3 million subscribers. The potential here is huge, without ever having to sully the brand.
3. From sponsor to sponsored is money to my ears. Netflix has always been a great advertiser. Its aggressive affiliate program made sure that Webmasters big and small were pimping the service shortly after it was launched. Early on, it even made the real-world connection by teaming up with retailers like Best Buy
These days Netflix is just as creative. Go to Yahoo!
Even companies like eBay
Netflix has invested time and money to make sure it knows its customers well. Subscribers have rented movies and rated them. That kind of information helps Netflix produce practically perfect film recommendations. Just wait until that kind of targeting is applied to incoming ads.
Marketers? Control your drooling.
Other headlines you may want to check out:
- Learn more about Netflix's ad-vantageous move.
- The company is also selling some of its pre-viewed discs these days.
- It's all part of the company's realization that it needs to think about tomorrow.
Along with Netflix, Time Warner and eBay are selections of the Motley Fool Stock Advisor newsletter.
Longtime Fool contributor Rick Munarriz has been a Netflix subscriber -- and investor -- since 2002. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.